In a shocking turn of events, the global cryptocurrency market experienced a major downturn as the Securities and Exchange Commission (SEC) filed a lawsuit against Binance, the world’s largest cryptocurrency exchange.
According to data from Coinglass, crypto traders lost approximately $315 million within a 24-hour period. The SEC’s legal action not only directly impacted the exchange but also caused significant damage to an estimated 117,858 short-term investors.
Within the span of a day, long positions worth around $289 million were completely liquidated, marking the largest liquidation event in the past three months. Meanwhile, those who had placed short orders suffered losses exceeding $23.69 million.
Bitcoin traders bore the brunt of the liquidation, with nearly $113.99 million being wiped out. Ethereum investors faced losses of $41 million as the coin’s price plummeted to $1,770 by 4 p.m. on June 5th. Additionally, approximately $6.88 million worth of BNB positions were liquidated as the coin experienced a sharp decline.
Other assets such as XRP, LTC, and DOGE also faced liquidation, amounting to $7.6 million, $7.3 million, and $6.03 million, respectively. Across various exchanges, the majority of liquidations occurred on OKX, Binance, and ByBit, accounting for 75% of the total liquidation value, with 92% of it being long positions. Other exchanges, including Huobi, Deribit, and Bitmex, also experienced significant liquidation events.
Overall, the entire market was engulfed in a sea of red. Within the past 24 hours, BNB plummeted by 10% to $274.9 and has yet to show signs of recovery. Other coins like SOL and ADA also experienced similar declines. Bitcoin, the largest cryptocurrency by market capitalization, traded below $26,000 for the first time since March.
The sudden SEC lawsuit against Binance caught traders off guard. The world’s largest exchange was accused of providing unauthorized securities services, market manipulation, intentionally allowing U.S. users on Binance.com, and several other charges.
Moreover, the SEC believes that a multitude of cryptocurrencies traded on Binance qualify as securities, including BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI. The prices of these coins and tokens are at risk of negative consequences due to being designated as securities. Therefore, investors are advised to exercise caution when trading during this period.
The SEC’s lawsuit against Binance has not only resulted in substantial financial losses but has also shaken investor confidence in the cryptocurrency market. The repercussions of this legal action are likely to be felt for some time, with potential regulatory implications for the entire industry.
Read more:
- Binance Faces SEC Lawsuit Over Alleged Securities Rule Violations, Resulting In A 6% Plunge In BNB Price
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